Fraudulent Billing / Medicare Fraud
What is Medicare and Medicaid fraud?
Vulnerable nursing home residents can be easy prey for nursing home care providers and suppliers who abuse or defraud the Medicare and Medicaid system. The very ill or elderly can be easy targets for exploitation as they are often unable to monitor their own bills for fraudulent charges. Medicare fraud affects every citizen including:
- nursing home residents who depend on Medicare; fraud can diminish the quality of treatment they receive, and, influence decisions on resident’s care, based on financial incentives rather than medical necessity;
- the overwhelming majority of honest healthcare professionals and other caregivers; fraud decreases funds available for important health care programs and legitimate reimbursement, and
- tax payers, fraud wastes billions of tax dollars.
Each year the government reimburses approximately $40 billion in payments to nursing homes and $4 billion in payments to various providers of medical supplies and services for Medicare beneficiaries residing in nursing homes. The United States General Accounting Office estimates that $1 out of every $7 spent on Medicare is lost to fraud and abuse. In 1999 alone, Medicare lost nearly $13.5 billion to fraudulent or unnecessary
claims.[1]
What is the primary weapon for fighting Medicare and Medicaid fraud?
The federal False Claims Act (Qui Tam) is the primary weapon in the fight against Medicare fraud. The largest government recoveries have resulted from the efforts of private persons who alert the government to fraud by filing a “whistleblower” lawsuit. These qui tam actions are brought under a federal law known as the False Claims Act, 31 U.S.C. Sec. 3729 et seq. The Act is intended to encourage people with information about possible fraudulent acts to come forward to help stop Medicare fraud. The qui tam law allows a person who has direct knowledge of anyone who is taking federal money under false pretenses (such as falsely claiming to provide adequate nursing care and being paid federal money for that care) to sue on behalf of the government.
These individuals or whistleblowers are awarded a significant percentage of the money the government recovers as a result of their successful whistleblower lawsuits. Medicare fraud qui tam lawsuits have been responsible for some of the government’s biggest health care fraud recoveries. In 2005, the Justice Department recovered $1.4 billion in fraud and false claims and has recovered more than $15 billion since 1986. In 2005, whistleblowers were awarded $166 million for succeeding in their
claims.[2]
Under the False Claims Act, if a defendant is found liable it must pay three times the government’s losses plus pay a fine for each false claim. The guilty defendant also must pay the fees and the case-related expenses of the whistleblower’s attorney. If the government takes the case and recovers money, the plaintiff can get as much as 25 percent of the money recovered. If the government does not take the case, the plaintiff and his or her attorney can litigate the case in federal court themselves and recover up to 30 percent of the money returned to the government. In addition, the law protects whistleblowers from being fired for filing false claims lawsuits against their employers.
Congress decided to give whistleblowers a share of the recoveries that result from qui tam lawsuits to give people a strong incentive to step forward and take the personal and professional risks involved in reporting fraud. It also wanted to encourage private law firms to risk their resources in litigating cases on the public’s behalf. The Department of Justice (“DOJ”) reports that after violent crime, health care fraud is the department’s top priority. The number of health care fraud investigations at the DOJ increased from 270 cases in 1992 to more than 4,000 in 1997.
What are some typical health care fraud schemes?
Below are a few common examples of how dishonest staff and or management personnel at nursing home facilities and suppliers abuse the Medicare system and ultimately affect our most vulnerable citizens. The following typical fraudulent schemes have been successfully prosecuted on the basis of qui tam or whistleblower lawsuits:
- Billing for brand-named drugs when generic drugs are actually provided.
- Billing more for a series of tests when a single test was asked for (also known as “bundling”).
- Billing for services, procedures or supplies that were not provided.
- Misrepresentation or “up-coding” of services (billing less expensive procedures as more expensive procedures).
- Billing for services performed by a lesser-qualified person, i.e. billing at doctor rates for work that was actually conducted by a nurse or resident intern (another example of “upcoding”).
- Misrepresentation regarding the charges for services, procedures or supplies provided.
- Fraud in cost reporting (inclusion of unrelated expenses).
- Paying prohibited kickbacks for patient referrals that result in the government paying for medically unnecessary services and equipment.
- Falsely inflating the numbers of hours nurses spend caring for patients or submitting false nurse sign-in sheets and other fabricated documents to support bills.
Contact Our Nursing Home Malpractice, Nursing Home Abuse
Lawyer
If you have direct knowledge that your family member or a resident in the nursing home where you work did not receive adequate care and the government is paying for any part of that care, you may be able to file a case in federal court based on the False Claims Act, qui tam provision. For more information on qui tam lawsuits, please
contact
us.
Resources:
The False Claims Act, 31 U.S.C. Sec. 3729 et seq.
Department of Health and Human Services (“HHS”), Statement of Kathleen A. Buto Associate Administrator for Policy Health Care Financing Administration on Health Care Fraud and Abuse in Nursing Homes before the House Committee on Government Reform and Oversight Subcommittee on Human Resources (July 10, 1997).
Department of Justice (DOJ), Guidance on the Use of the False Claims Act in Civil Healthcare Matters 2 (June 3, 1998.).
United States General Accounting Office (“GAO”), Report to Congressional Committees, Medicare Fraud and Abuse: DOJ Continues to Promote Compliance with False Claims Act Guidance, April 2002
Vkadeck, B. C. 1995, Medicare, Medicaid Fraud, and Abuse, Journal of the American Medical Association 273:766
False Claims Act Cases: Government Intervention in Qui Tam (Whistleblower) Suits,
http://www.usdoj.gov/usao/pae/Documents/fcaprocess2.pdf
Department of Justice (DOJ), 2005 Press Release, Justice Department Recovers $1.4 Billion in Fraud & False Claims in Fiscal Year 2005; More Than $15 Billion Since 1986.
http://www.usdoj.gov/opa/pr/2005/November/05_civ_595.html
[1] United States General Accounting Office (“GAO”), Report to Congressional Committees, Medicare Fraud and Abuse: DOJ Continues to Promote Compliance with False Claims Act Guidance, April 2002
[2] Department of Justice (DOJ), 2005 Press Release, Justice Department Recovers $1.4 Billion in Fraud & False Claims in Fiscal Year 2005; More Than $15 Billion Since 1986. http://www.usdoj.gov/opa/pr/2005/November/05_civ_595.html
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